Benchmark’s Burt Cabañas’ Approach to Luxury Resorts

For the past 33 years, Burt Cabañas has served as the visionary force behind Benchmark Hospitality’s sophisticated approach to developing and managing luxury resorts, five-star hotels, and conference centers. Late last year his firm stepped into a controversy as the owner of a luxury resort in Curaçao terminated its management agreement with Hyatt and installed Benchmark.

LODGING: How did the Curaçoa Santa Barbara Beach and Golf Resort deal come about? How awkward was it dealing with Hyatt after signing on?

CabaÑas: When we were hired by the owner to manage that property, we didn’t know who ran it at the time. After we got to the property we had all of our people, including our attorneys, look at it. The thing is, our fiduciary responsibility is to the owner. If Hyatt has an agreement that it believes was broken then it needs to deal with the owner on that, not with us. I don’t want to be in anyone else’s legal battle.

LODGING: Is there justification for having long-term management contracts with big brands like this anymore for the types of resorts you run?


CabaÑas: No, the technology platforms for booking rooms and taking virtual tours have reduced the value of a franchise or chain affiliation at the level of properties that my company manages. For limited-service properties I’m sure there’s still enormous value. But at my level, the value for the affiliation is better founded in groups like Preferred or Leading Hotels.

Loyalty comes from good service and great locations, not necessarily from the franchise or the chain.

LODGING: Will you be signing on to Preferred Hotel’s recently announced points-based loyalty program?

CabaÑas: We are evaluating two points programs internally—Preferred and Stash Rewards. Before we move forward with these, however, we need to be prepared to commit to this for the rest of our lives and we need to make sure that whatever costs are charged to the property are in the best interests of the owners, not us.

Three years ago, we created a national reservations office and set it up so we don’t book anything unless the property rolls over to us. This allowed us to consolidate and manage all the third-party rollovers in one place. Since doing this we’ve increased overall rates and reservation conversions from 18 to 52 percent. Now we have a higher coverage ratio for each property’s ability to book business and the owners only pay for what they get. So the Santa Barbara Resort, for instance, only funds this office to the degree that it gets a benefit.

LODGING: What do you like about working in the five-star hotel and resort space?

CabaÑas: I like the complexity. I like having more profit centers and more employees that need to do different things. I also like the multiple levels of service you have to give to each guest. Guests that are drawn to these sorts of resorts expect more than just to spend the night—they expect to be wowed. Every one of our properties has its own uniqueness that we leverage to create an experience of personal luxury. There are many chain hotels at which you can wake up in the morning after a night of drinking and not know if you were in Chicago, Denver, or Philadelphia. That’s not our approach.

LODGING: What’s the outlook for Benchmark in terms of projects on the horizon?

CabaÑas: Our pipeline has never been more full. We are equally divided between the takeover of existing assets that need to be repositioned and startup projects in which we set the standard from the start. The financial world, not the equity so much but the debt—the banking institutions—is really the driver of just about everything on these deals. Banks move at light speed when it comes to takeover projects they want resolved. When it comes to new projects, the banks move at the speed of a turtle.

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